The IP Runway: Issue No. 18
Intellectual property insights for the global business of fashion.
When One Word Changes the Size of the Bill
Edition eighteen is about a handbag, a serial number and a very expensive disagreement. One word no luxury seller wants to hear: counterfeit.
Chanel sued a luxury reseller in 2018. On November 3, 2026, more than eight years later, a federal appeals court upheld the jury verdict that the reseller, What Goes Around Comes Around, sold counterfeit Chanel handbags. The $4 million Chanel was awarded stands.
The reseller says the case was never about fakes. Chanel says it was. Which word applies decides how large the bill can get, and that is why a dispute over a few handbags took so long to settle.
The case, fast
Chanel brought the case in the Southern District of New York, in federal court in Manhattan. After a trial that ran for weeks, a jury ruled unanimously for Chanel in February 2024. It found for Chanel on all four of its claims, including the sale of counterfeit Chanel handbags, and awarded $4 million in statutory damages. The jury also found the reseller liable on claims that it falsely suggested a connection to Chanel, and on claims over its use of Chanel hashtags in its marketing.
The handbags at the center of the counterfeiting claim carried serial numbers that Chanel said had been assigned to an authorized factory, stolen, and voided in its internal records. The reseller’s response, given after the verdict, was that the case was about items voided in Chanel’s database, not about a counterfeit product, and that it has never sold a non-genuine one.
In 2025 the trial court entered a final judgment that added a permanent injunction and ordered the reseller to hand over about $12,700 in profits. The reseller appealed, and the Second Circuit heard the appeal in September. On November 3, it issued a summary order. It affirmed the judgment, including the counterfeiting verdict and the $4 million award. It also set aside, as premature, the trial court’s award of more than $560,000 in litigation expenses to Chanel.
Eight years, one verdict, and one word doing the heavy lifting.
Where infringement ends and counterfeiting begins
American trademark law treats two things differently. Ordinary infringement is using a mark in a way that confuses buyers. Counterfeiting is the more serious charge, and it carries statutory damages, which are set by the law and do not depend on proof of how much money Chanel lost.
That line was drawn in this case itself. The trial judge, Louis Stanton, explained that a product can infringe a trademark without being counterfeit. In his instructions to the jury, as one account puts it, a counterfeit must be a copy.
On appeal, the reseller challenged, among other things, how the jury had been instructed on what counts as counterfeit, and whether the $4 million was justified. The Second Circuit affirmed the judgment. The reports available describe that result more than the court’s reasoning, and a summary order does not set a binding precedent for other courts.
Why this matters beyond one reseller
The label decides the bill. Goods can infringe without being counterfeit, as the trial judge himself explained. As counterfeit, the handbags in this case brought the statutory damages the jury awarded. For any house, the choice between those two words is a strategy as much as a fact.
Records are evidence. Chanel’s case rested heavily on serial numbers it said had been stolen and voided. Reports on the verdict point to bags carrying voided, stolen serial numbers among the evidence. According to trial coverage, the reseller’s lawyers said that sharing its sales data with Chanel had led Chanel to discover discrepancies in some of its own serial numbers. That is the reseller’s account, but it shows how a house’s own records can become part of the dispute. A house that keeps careful records of what it produced, where, and under which number can use them as proof, and can be tested on them.
Litigation is slow, and it is not finished. More than eight years separated the filing from this ruling, and the question of Chanel’s litigation expenses is still open after the appeal.
One caution. This is a summary order in a case about a specific set of handbags and a specific set of records. It confirms the verdict. It does not say, in a way that binds other courts, how far the word counterfeit reaches.
Reading the runway
For a luxury house, a trademark is a name on a bag, and a legal label on a dispute. The label can be worth more than the bag.
Chanel went in with one word and came out with it intact. The reseller’s counter, that it was about voided numbers and not fakes, did not change the verdict.
More soon.
The IP Runway
Sources: Law360 and IPWatchdog, reporting on the Second Circuit’s summary order of November 3, 2026, in Chanel, Inc. v. What Goes Around Comes Around LLC (No. 25-722); WWD, Fashion Dive and Fashionista, on the February 2024 jury verdict; U.S. District Court, S.D.N.Y. docket, No. 1:18-cv-02253.
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